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DHI vs MTH
Which Stock Would AI Choose? D.R. Horton (DHI) vs. Meritage Homes (MTH) Stock Comparison
Key Takeaways
- D.R. Horton (DHI) is America's largest homebuilder by volume, with annual revenues exceeding $34 billion, offering unmatched scale and diversification across homebuilding, rental operations, and financial services.
- Meritage Homes (MTH) is the fifth-largest U.S. homebuilder, distinguished by a spec-home strategy emphasizing move-in ready inventory and affordability, with home closing revenue of approximately $5.8 billion in fiscal 2025.
- Both companies face the same macro headwinds — elevated mortgage rates, affordability constraints, and cautious consumer sentiment — yet their scale and strategic responses differ meaningfully.
- DHI has demonstrated superior capital return discipline, repurchasing billions in stock annually and maintaining a lower debt-to-capital ratio, while MTH is aggressively expanding its community count and accelerating buybacks.
- Margin compression has affected both builders, but D.R. Horton's homebuilding pre-tax margins and return on equity (ROE) — a measure of profitability relative to shareholder equity — have held up more consistently than Meritage's.
- For investors weighing scale and stability against turnaround potential, the comparison highlights a classic large-cap versus mid-cap trade-off within the homebuilding sector.
Introduction
The U.S. homebuilding sector has navigated a turbulent period marked by elevated mortgage rates, persistent affordability challenges, and shifting consumer confidence. Within this landscape, two publicly traded homebuilders — DHI (D.R. Horton) and MTH (Meritage Homes) — represent distinctly different approaches to capturing housing demand. D.R. Horton, the nation's largest builder by volume, leverages massive scale and a diversified operational footprint. Meritage Homes, in contrast, deploys a focused, spec-driven strategy aimed at first-time and move-up buyers. This comparison examines how these two industry participants have performed in the current cycle and what their relative positioning suggests for investors evaluating the homebuilding space.
DHI Overview and Recent Performance
D.R. Horton, headquartered in Arlington, Texas, has held the title of America's largest homebuilder by volume since 2002, operating across 126 markets in 36 states. The company's diversified model extends beyond traditional homebuilding into rental operations, majority ownership of lot developer Forestar Group, and financial services including mortgage financing and title insurance. In its most recent fiscal quarter, DHI reported consolidated revenues of $6.9 billion with net sales orders rising 3% year over year to 18,300 homes. For the trailing twelve months, the company closed 83,622 homes in its homebuilding operations alone.
Recent market activity has reflected a cautious demand environment, with affordability constraints and elevated mortgage rates weighing on buyer sentiment. D.R. Horton has responded by offering sales incentives — including mortgage rate buydowns, which are permanent or temporary interest-rate reductions on home loans — and emphasizing smaller, more affordable floor plans. The company's debt-to-capital ratio stood at 18.8% as of its most recent quarter, underscoring a conservative balance sheet. Meanwhile, management has returned substantial capital to shareholders, repurchasing 4.4 million shares for approximately $670 million in a single quarter while maintaining a quarterly dividend of $0.45 per share.
MTH Overview and Recent Performance
Meritage Homes, based in Scottsdale, Arizona, ranks as the fifth-largest public homebuilder in the United States. The company specializes in entry-level and first move-up single-family homes, with a strategic emphasis on move-in ready, spec-built inventory — homes built without a specific buyer already under contract. This approach allows MTH to offer faster delivery times and greater certainty to buyers in an uncertain market. In its most recent reported quarter, Meritage closed 3,755 homes and generated home closing revenue of $1.4 billion, with an average sales price on closings of approximately $375,000.
In recent months, Meritage has pursued an aggressive community count expansion, growing its active communities by roughly 15% year over year to 334 locations — the highest in company history. This footprint expansion has supported order volumes even as the absorption pace (the rate at which homes sell per community per month) has decelerated. However, margin pressures have been notable: home closing gross margins declined to 16.5% in the most recent quarter, reflecting increased incentive usage, inventory impairment charges, and terminated land deal costs. On an adjusted basis excluding non-recurring charges, gross margins were approximately 19.3%. Management has also undertaken cost-cutting measures, including severance actions, while announcing plans for approximately $400 million in share repurchases during 2026.
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Head-to-Head Comparison
Scale and Diversification: The most immediate contrast between these two builders is sheer size. D.R. Horton's annual consolidated revenues of approximately $34 billion dwarf Meritage's roughly $5.8 billion in home closing revenue. DHI closes more than five times the number of homes annually and operates a vertically integrated model that includes a majority stake in Forestar (a publicly traded lot development company), a growing rental segment, and captive financial services. MTH, by comparison, is a more concentrated pure-play on entry-level homebuilding.
Margin Profiles: D.R. Horton's homebuilding pre-tax profit margin has ranged between roughly 10.8% and 14.7% in recent quarters, while Meritage's adjusted home closing gross margins have compressed from about 25% a year ago to roughly 19%-20% recently. The sharper margin decline at MTH reflects the company's higher sensitivity to incentive-driven pricing pressure and one-time charges related to land portfolio repositioning. D.R. Horton's broader revenue streams — including its rental and financial services segments — provide some cushion against homebuilding margin cycles.
Capital Allocation and Balance Sheets: Both companies maintain disciplined balance sheets, but the numbers differ in magnitude. DHI ended its most recent quarter with $6.6 billion in total liquidity and a debt-to-capital ratio of 18.8%. MTH held $775 million in cash with a net debt-to-capital ratio of 16.9%. D.R. Horton's aggressive share repurchase program — reducing its outstanding share count by roughly 9% year over year — signals strong confidence in intrinsic value. Meritage, too, is accelerating buybacks, targeting $400 million in 2026.
Growth Trajectory: Meritage's 15%-plus community count growth represents a meaningful expansion initiative that could translate into outsized revenue growth if housing demand stabilizes. D.R. Horton, already operating at enormous scale, is focused more on optimizing returns within its existing footprint rather than opening new markets. The contrast is essentially growth potential versus entrenched stability.
Risk Considerations: Both stocks are sensitive to mortgage rate movements, consumer confidence trends, and labor and materials cost inflation. MTH carries additional risk from its land portfolio review, which resulted in terminated option contracts and impairment charges in recent quarters. DHI, with its larger unsold completed home inventory (7,300 units, including 900 aged beyond six months), faces carrying-cost risk if demand slows further.
Tickeron AI Verdict
Based on observable trend consistency, financial stability metrics, and relative positioning within the homebuilding sector, Tickeron's AI-driven analysis would likely tilt in favor of DHI (D.R. Horton) under current market conditions. The company's massive scale, diversified revenue streams, lower relative margin compression, robust liquidity position, and consistent capital return program offer a more resilient profile amid ongoing affordability headwinds. While MTH presents an intriguing growth narrative with its community count expansion and accelerated buyback program, the combination of sharper margin erosion, land portfolio restructuring charges, and higher operational sensitivity to short-term demand fluctuations introduces additional uncertainty. In probabilistic terms, D.R. Horton's broader foundation suggests greater capacity to weather near-term housing market volatility while sustaining shareholder returns — a factor that algorithmic models weighing risk-adjusted momentum would likely reward.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is DHI is a Buy and MTH is a StrongBuy.
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is undervalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
DHI’s FA Score shows that 1 FA rating(s) are green whileMTH’s FA Score has 2 green FA rating(s).
- DHI’s FA Score: 1 green, 4 red.
- MTH’s FA Score: 2 green, 3 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
DHI’s TA Score shows that 3 TA indicator(s) are bullish while MTH’s TA Score has 3 bullish TA indicator(s).
- DHI’s TA Score: 3 bullish, 8 bearish.
- MTH’s TA Score: 3 bullish, 8 bearish.
Price Growth
DHI (@Homebuilding) experienced а -2.52% price change this week, while MTH (@Homebuilding) price change was -3.77% for the same time period.
The average weekly price growth across all stocks in the @Homebuilding industry was -3.97%. For the same industry, the average monthly price growth was -5.67%, and the average quarterly price growth was -0.04%.
Reported Earning Dates
DHI is expected to report earnings on Oct 29, 2026.
MTH is expected to report earnings on Oct 28, 2026.
Industries' Descriptions
@Homebuilding (-3.97% weekly)Homebuilding includes companies residential home construction companies, renovators and repair firms. The companies may be building single-family or multifamily homes, condominiums or mobile homes. Over the five years to 2019, the Home Builders industry is estimated to have grown at an annualized rate of 2.5% to reach $89.4 billion, (including expected growth of 2.6% in 2019), according to a study by IbisWorld. After having suffered one of its worst crises a decade ago during the last macroeconomic recession–which had much of its origins in U.S. real estate – the homebuilding industry has been recovering steadily so far. Higher disposable incomes and improving economic activity have bolstered consumers’ purchases of homes. While revenue of the Home Builders industry remains well below its prerecession high, demand growth estimates show promise.
| DHI | MTH | DHI / MTH | |
| Capitalization | 40B | 4.58B | 874% |
| EBITDA | 3.92B | 451M | 870% |
| Gain YTD | -0.089 | 8.204 | -1% |
| P/E Ratio | 13.64 | 14.63 | 93% |
| Revenue | 33.4B | 5.4B | 619% |
| Total Cash | 2.08B | 807M | 258% |
| Total Debt | 7.18B | 1.91B | 377% |
DHI | MTH | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 54 | 56 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 56 Fair valued | 6 Undervalued | |
PROFIT vs RISK RATING 1..100 | 61 | 64 | |
SMR RATING 1..100 | 64 | 83 | |
PRICE GROWTH RATING 1..100 | 60 | 59 | |
P/E GROWTH RATING 1..100 | 32 | 10 | |
SEASONALITY SCORE 1..100 | 50 | 50 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
MTH's Valuation (6) in the Homebuilding industry is somewhat better than the same rating for DHI (56). This means that MTH’s stock grew somewhat faster than DHI’s over the last 12 months.
DHI's Profit vs Risk Rating (61) in the Homebuilding industry is in the same range as MTH (64). This means that DHI’s stock grew similarly to MTH’s over the last 12 months.
DHI's SMR Rating (64) in the Homebuilding industry is in the same range as MTH (83). This means that DHI’s stock grew similarly to MTH’s over the last 12 months.
MTH's Price Growth Rating (59) in the Homebuilding industry is in the same range as DHI (60). This means that MTH’s stock grew similarly to DHI’s over the last 12 months.
MTH's P/E Growth Rating (10) in the Homebuilding industry is in the same range as DHI (32). This means that MTH’s stock grew similarly to DHI’s over the last 12 months.
| DHI | MTH | |
|---|---|---|
| RSI ODDS (%) | 5 days ago 67% | 4 days ago 73% |
| Stochastic ODDS (%) | 4 days ago 70% | 4 days ago 73% |
| Momentum ODDS (%) | 4 days ago 65% | 4 days ago 71% |
| MACD ODDS (%) | 4 days ago 66% | 4 days ago 69% |
| TrendWeek ODDS (%) | 4 days ago 67% | 4 days ago 71% |
| TrendMonth ODDS (%) | 4 days ago 65% | 4 days ago 68% |
| Advances ODDS (%) | 7 days ago 66% | 8 days ago 70% |
| Declines ODDS (%) | 4 days ago 63% | 4 days ago 70% |
| BollingerBands ODDS (%) | 8 days ago 59% | 8 days ago 63% |
| Aroon ODDS (%) | 4 days ago 61% | 4 days ago 67% |
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DHI and
Correlation & Price change
A.I.dvisor indicates that over the last year, DHI has been closely correlated with PHM. These tickers have moved in lockstep 91% of the time. This A.I.-generated data suggests there is a high statistical probability that if DHI jumps, then PHM could also see price increases.
MTH and
Correlation & Price change
A.I.dvisor indicates that over the last year, MTH has been closely correlated with KBH. These tickers have moved in lockstep 89% of the time. This A.I.-generated data suggests there is a high statistical probability that if MTH jumps, then KBH could also see price increases.